Introduction

In the consolidated financial results for H1, net sales and all profit levels declined YoY.

By segment, our business in Japan experienced both lower sales and lower profits. This was mainly due to the sales volume of dairy products, including the Yakult 1000 series, falling short of both planned targets and results from the previous year.

Meanwhile, our overseas business recorded increased sales volume compared to the previous year. However, higher operating costs, such as raw material costs, personnel and marketing expenses, combined with negative foreign exchange effects, resulted in both lower sales and lower profits.

As for the full-year forecast, we expect sales volumes to recover in H2. Nevertheless, considering the results of H1, we have reassessed our full-year outlook and decided to revise downward our forecasts for net sales, operating profit, and ordinary profit.

While the H1 results fell short of our targets, we are determined to recover in H2 by promoting sales further, as well as implementing new public relations and advertising initiatives in Japan. Overseas, in addition to continued growth in the Americas, we expect recovery in the Asia and Oceania region, which should contribute to overall performance improvement.

Shareholders return

Regarding dividends, based on our policy of pursuing a progressive dividend to achieve continuous increases, as we have already announced, the interim dividend was increased by JPY1 from the previous year to JPY33.

We project a year-end dividend of JPY33, resulting in an annual dividend of JPY66, an increase of JPY2 from the previous year. We consider it important to continue giving shareholder returns our constant attention.

Initiatives in each segment

Food and Beverage Business (Japan)

In H1, the average daily sales volume of dairy products was 9.16 million bottles, down 7% YoY.

Consumer sentiment weakened due to rising prices, while competition from other companies intensified, further tightening the business environment. Although we had planned to expand sales through Yakult Ladies, their activities slowed due to the record-breaking heat, resulting in sluggish sales. For key products, such as the Yakult 1000 series and the New Yakult series, we believe focused measures for improvement are necessary.

In H2, we will work to increase sales through promotional campaigns, revitalizing Yakult Ladies’ activities and in-store operations and enhancing evidence-based advertising. We aim to achieve an average daily sales volume of 9.3 million bottles for the full year.

Yakult 1000 series

In H1, the average daily sales volume was 2.97 million bottles, down 2.5% YoY.

This decline was partly due to a reactionary decrease following the surge in demand for the Yakult 1000 series. This fiscal year, we launched a new reduced sugar type in both the home delivery and retail store channels, expecting to attract new customers and drive further growth. However, many customers simply switched to the reduced sugar products from existing products, leading to limited net customer increases. On the other hand, since many people continue to experience sleep issues, we see opportunities to acquire new customers by having them personally experience the effectiveness of our products. Awareness and understanding of the reduced sugar product types are gradually expanding. We view this period as one that requires persistence and will continue developing our customer base patiently.

Reflecting current conditions, we have revised the full-year average daily sales target to 2.98 million bottles.

New Yakult series

In H1, the average daily sales volume was 2.79 million bottles, a decline of 10.6% YoY.

Since the 2023 price revision, sales volumes have been decreasing, and there are still no clear signs of recovery. We consider it essential to achieve an early turnaround. As one initiative to achieve this turnaround, we launched New Yakult Peach Flavor, which was launched overseas on a limited-time basis starting November 2025. As in the past, we will continue to promote the value of L. paracasei strain Shirota and encourage interested customers to drink Yakult brand products on a daily basis, thereby leading to a recovery in sales volume.

Considering current conditions, we have revised the full-year target for average daily sales volume to 2.84 million bottles.

(Main activities in the second half of the fiscal year)

October 2025, the Yakult brand was officially certified by Guinness World Records as the largest lactic acid drink/ lactic acid bacteria drink brand. Following this recognition, we have begun introducing special commemorative packages for our Yakult series in Japan to increase visibility.

In addition to energizing activities in both the home delivery and retail store channels, we will launch campaigns linked to our 90th anniversary and roll out diverse advertising initiatives, including those supporting exam takers and highlighting scientific evidence. Through these multifaceted efforts, we aim to achieve our full-year targets.

Food and Beverage Business (Overseas)

From July to September 2025, the average daily sales volume overseas exceeded the previous year by 0.5%, marking the fifth consecutive quarter of YoY growth. We believe the overall decline has bottomed out and that we are now transitioning into a recovery phase, gradually improving performance going forward.

Yakult U.S.A. Inc.

The utilization rate at our first plant in California remains extremely high, approaching the limit of its supply capacity. Currently, the daily sales volume has increased to approximately 800,000 bottles, and until the second plant under construction in Georgia is completed, we expect levels to remain around the current volume. Therefore, it is difficult to pursue aggressive expansion of our sales channels at this stage. At present, our products are distributed through about 20,000 stores, which represents less than half of all supermarkets in the country. However, including smaller outlets, such as convenience stores, we see the potential to expand distribution to over 100,000 stores across the country. The market potential is therefore considered very high.

Once the second plant begins operations, we plan to first strengthen the supply system for existing products, after which we will introduce new products. During this fiscal year, although in small quantities, we began air-shipping Y1000 from Japan for sale in Hong Kong and Singapore. Customer response has been extremely favorable, confirming that there is demand for such products overseas. In the US market as well, we aim to introduce high value-added products, such as those in the Yakult 1000 series, at an early stage.

Yakult S.A. De C.V. (Mexico)

Recently, sales volumes have temporarily declined, affected by a deterioration in consumer sentiment. To counter this, as part of our promotional measures, we have started rolling out new products that have proven successful in countries such as China. Since September 2025, we began sales of Yakult Muscat Flavor through retail store channels, followed by its introduction in the home delivery channel in October. We believe this new product will attract customer attention and encourage trial purchases, contributing to increased sales volume.

Given that product awareness and understanding have steadily deepened since our market entry, we do not expect sales stagnation to persist over the long term.

Yakult Vietnam Co., Ltd. (Vietnam)

We revised prices across all sales channels in April and May 2025, yet sales volumes have continued to post a single-digit growth rate in the high range. Thanks to the favorable performance of Yakult Light, which was launched in April 2025, sales remain at a high level, and this fiscal year’s performance has successfully surpassed that high benchmark.

There still exists significant potential for deeper market penetration through geographical expansion and increased sales per store.

Guangzhou Yakult Co., Ltd., Yakult (China) Corporation

Although consumer activity remains sluggish due to a downturn in the economic environment, our proactive sales measures have been yielding visible results.

Sales from January to June 2025 increased 4.8% YoY, and results for July through September also exceeded the previous year by 5.2%, marking five consecutive quarters of YoY growth. The Yakult Muscat Flavor launched in April 2025 contributed further to sales expansion.

Additionally, to optimize our production structure and make more efficient use of management resources, we plan to close the Guangzhou Yakult Plant No. 1 at the end of November 2025. This initiative will improve the overall production utilization rate in China and enhance profitability through reductions in fixed costs.

We will continue implementing both short-term and medium-to-long-term initiatives in parallel, continuously reviewing measures based on performance evaluation to maintain effective operations.

PT. Yakult Indonesia Persada

While results from January through June 2025 were below the previous year, performance from July through September exceeded the previous year by 3.2%, marking the first YoY increase in 14 quarters. Yakult Mango Flavor, launched in June 2025, also contributed to sales growth. We are currently taking a multifaceted approach that includes expanding supermarket distribution, running SNS-based campaigns, selling through e-commerce platforms, and launching new channels, such as the school lunch market.

By steadily achieving quarterly sales growth above the previous year, we expect to reach a clear turning point toward recovery.

Conclusion